Ethiopia

Country Profile

With a current population of 81.2 million, Ethiopia classifies as the second most populous country in Sub-Saharan Africa. It is one of the world’s poorest countries with a per capita income of USD 200 ranking 169 out of 177 countries measured on the current United Nations Human Development Index (2007/08). This is despite the fact that the country has abundant resources and good potential for development.

With a population growth rate of 2.79%, the labour force (the employed and unemployed) has continued to grow faster than what the economy can gainfully and productively employ. Out of the 33,088,792 economically active population, 1,653,686 are unemployed. The unemployment rate for urban areas is estimated at 20.6%, which is about ten times higher than in rural areas (2.6%). The incidence of unemployment also varies by sex where in urban areas, unemployment among women is estimated to be about 27.2%, compared to 13.7% among men. The same pattern holds true for rural areas, where approximately 4.6% of women and 0.9% of men are reported to be unemployed.

The incidence of poverty is further exacerbated by the HIV and AIDS pandemic. Recent information indicates that 1,037,267 people were living with HIV and AIDS in 2008. In particular, adult HIV prevalence in Ethiopia in 2005 had levels more than five times higher in urban areas (10.5%) than in rural areas (1.9%). AIDS accounted for about 34% of all deaths occurring among the population aged 15-49 years (about 66% in urban areas).

Cooperative Situation

The Ethiopian cooperative movement has rapidly expanded in the last fifteen years. According to the Federal Cooperative Agency, about 14,423 cooperatives were registered by 2005. Cooperatives exist in various economic sectors and have a larger presence in the service, agriculture and industry sectors. About 80% of the primary cooperatives operate in the service sector, mainly dominated by housing (35%), multipurpose (32%) and savings and credit cooperatives (31%). In the agriculture sector, primary cooperatives, representing about 6%, are involved in grain, coffee, vegetable, dairy, fish, irrigation and honey production. In the industry sector, cooperatives mainly exist in handicraft production and marketing.

The number of cooperatives in Ethiopia, as well as the size of membership, indicates that the large majority of the population and areas have not been able to explore and utilize the potential services of cooperatives. For example, the agricultural sector represents a source of livelihood for about 85% of the total population in the country; however, only 8% of the potential rural population belongs to a cooperative.

The cooperative movement in Ethiopia is also characterized by the formation of cooperative unions as a new phenomenon: the first agricultural union was established in 1997. Currently there are 104 unions that bring together about 13% of the primary cooperatives in the country and 91% of these cooperative unions are in agriculture. Another significant figure shows the dynamism of the Ethiopian cooperative movement, with a 100% increase in the number of unions in 2005.

The cooperative movement in Ethiopia is expanding rapidly, creating opportunities for different sectors to have lasting impacts on improving the lives of the poor and vulnerable, CoopAFRICA seeks ways to support the movement through technical and financial support thereby promoting all key objectives of the CoopAFRICA programme: Establishing an enabling legal and policy environment; enhancing access to support services through Centres of Competence; promoting effective co-ordinating structures; and strengthening the cooperative movement through a Challenge Fund mechanism.

Challenge Fund Partners

The Challenge Fund facility of CoopAFRICA is concerned with three main areas of cooperative development: services, innovation and training. CoopAFRICA has initiated two calls for proposals under this facility. In the first call which closed in June 2008 a total of 145 proposals were submitted to CoopAFRICA. Eight proposals were selected for funding totaling USD 301,354. In the second call 141 project proposals were received in December 2008 from 6 countries, of which 22 projects have been selected. The projects for the second round are worth an estimated sum of USD 1, 330, 000. Applications submitted during the third call, held in May 2009, are currently being processed. Small grants of up to USD 20,000 are considered and selected throughout the year without a special call.

The following projects from Ethiopia have been selected for funding through the CoopAFRICA Challenge Fund:

Ambo University College: Feasibility and organization of Health Coops - (pdf file, 418kb). The project responds to the high prevalence of HIV/AIDS and other health issues such as malaria, malnutrition, and child mortality in Ethiopia. The Ambo University College is working towards the introduction of health cooperatives in the country. It is expected that such an initiative would benefit the weaker sections of the community and the rural population by providing basic medical facilities and revisiting the importance of environment and sanitation. The project will involve a feasibility study, including a field trip to a functioning health cooperative in India, as well as the design and construction of the health cooperative’s infrastructure.

Joshua Multi-Purpose Coop Society with Ltd Liability: Genuine & Accessible Consumer Goods Service Project - (pdf file, 216kb). The project will support members through the provision of consumer goods at reasonable local prices. In order to implement their objectives, members have approached and discussed a possible business partnership with the Oromia Cooperative union. A sustainable network with local agricultural producers unions including the Oromia Agricultural producer’s Unions located in Lume, Ada, Becho Arsi and Welega has been put into place. The project will be trading with designated factories and Ethiopia Merchandise Wholesale and Imported Trade Enterprise.

Ongoing projects with partners/actors involved

In addition to challenge fund support, CoopAFRICA is involved in an ILO multi-partnership Programme led by ILO/AIDS. This Programme consists of mobilizing the informal economy organizations and strengthening their capacity in order to contribute to the fight against HIV and AIDS. Among other kinds of organizations, the Programme is targeting cooperatives in particular. The main activities carried out by the Programme relating to cooperatives include:

Implementing a knowledge and learning toolkit to strengthen cooperatives

Training activities for trainers, peers educators and activists

Piloting projects for cooperatives to fight against HIV AIDS and social exclusion